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Pizzeria owner who funded crypto radio show and bought alpaca farm with PPP loans admits to fraud
PPP investigations extended: How many dollars have been injected into crypto through pandemic loans? One Texas frauder used PPP to buy $1 millions worth of Crypto.
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Crypto value adjusted for currency devaluation / inflation
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Government stimulated rich people's nest eggs and private jet funds with PPP loans
Interesting country, very closely associated with Switzerland and probably had similar draws from foreign entities for their banking system. Though it seems they now implement KYC. > The country participates in a customs union with Switzerland and uses the Swiss franc as its national currency. > The Principality of Liechtenstein also is known as an important financial centre, primarily because it specializes in financial services for foreign entities. The country's low tax rate, loose incorporation and corporate governance rules, and traditions of strict bank secrecy have contributed significantly to the ability of financial intermediaries in Liechtenstein to attract funds from outside the country's borders. The same factors made the country attractive and vulnerable to money launderers, although late 2009 legislation has strengthened regulatory oversight of illicit funds transfers. […] Until recently, the Principality's banking laws permitted banks to issue numbered accounts, but new regulations require strict know-your-customer practices for all new accounts. > Liechtenstein is one of the few countries in the world with more registered companies than citizens; it has developed a prosperous, highly industrialized free-enterprise economy and boasts a financial service sector as well as a living standard that compares favourably with those of the urban areas of Liechtenstein's much larger European neighbours. […] The government is working to harmonize its economic policies with those of an integrated Europe. As of 2014 the CIA World Factbook estimated the gross domestic product (GDP) on a purchasing power parity basis to be $4.978 billion. As of 2009 the estimate per capita was $139,100, the highest listed for the world. So 14 years ago it’s GDP PPP per capita was the highest in the world! Certainly quite a well off country.
So your numbers are off, because you divide 1 by the reserve rate in decimal form to get the money multiplier...so a 10% reserve results in a ten times multiplier...so that 100k in deposits would over time become a total of 1 mil; 100k in base money, 900k in broad. The thing people forget is that those loans get deposited somewhere, and this counts as deposits on that banks balance sheet allowing more to be lent, even though the money isn't physical cash. Also, this money is called broad money and counted as part of the m1 supply...and if you factor in the money multiplier you can track that almost all of the inflation to the money base is a result of the PPP loans in the US.
The "business cycle " is just the American Power Establishment running sequential large scale grift operations. This grift operation : PPP QE QT Upscale the bank monopolies - using taxpayer money.
Last string of bank failures lead to the biggest BTC rally of the past year. People keep forgetting FIAT is not real. There is an infinite amount of money. Banks cannot default unless the government decide to let them, do you think that's in their best interests? So long as all the money is floating to the top as a proportion they could not actually give a fuck about PPP.
The banks aren't collapsing. One bank collapsed because the previous administration removed some banking regulations. What war did the US lose? if you're talking about the Afghanistan withdrawal - that deal was signed by the previous administration. What war did the US join? If you're referring to the Ukraine war, then you should know that the US is currently not fighting a war against Russia. Would be major news if the US was in a war against Russia, right? But that's not what's happening. Get your facts straight. You're worried about inflation? tell me which Biden era decisions caused inflation? was it the covid stimulus checks that the previous administration issued as well? TWICE!? Was it the PPP loans that were just a giant handout to corporations or the stock market injection that was a giant handout to corporations? Oh, sorry. Those were both done by the previous administration as well black people murder rate. wtf are you even saying?! You don't even understand the lunatic Facebook memes that you're repeating. Homicide rates went up to pre-pandemic levels, that's it. Tell me which Biden era policies you think caused a spike in the African American homicide rates? Literally every single thing you just said was some shallow talking point that you just repeat without understanding it. You're hoping that you're talking to someone who understands less about current affairs than you do... because that's the only way you'll be able to come off as smart.
Thanks. Cory says it was PPP loan abuse, and he tends to be pretty on top of this stuff. If that's the case, and Cross River was given a C&D pertaining to those practices, how does that imply the bank is "next to go down"?
It's 3.2% by nominal GDP and 2.2% by PPP GDP
The US is majorly dropping the ball on so many things. People can’t afford houses because of the rates be drastically increased by FED. People can’t afford cost of living because of the massive printing from 2020-2022 where money was handed out to businesses in mass and much of it handed out to fake businesses signing up for PPP loans. They won’t bail out $20k in student loans but will guarantee 100% of billions and billions of dollars of Silicon Valley depositors in less than a weekend after bad banking decisions. It’s a perpetual case of missing the forest for the trees and it seems like the normal American citizens are always the ones paying the heaviest cost.
people forget this important tidbit of information. not only were individuals getting free money, but billions were handed out in PPP loans to many businesses that didn’t even need it. people were literally throwing money at investments.
Just look at the PPP program and all the fraud that happened there. Just another program where the rich got to screw the people yet again.
Well, alot of people saw the PPP as free money so its not shocking
DeSantis seems the type who would put a boot on your neck in every other regard. Whether he leaves crypto alone isn't relevant to most people, even in here. Trump made me rich by breaking the stock market (forcing rates to 0% *for no reason* plus signing trillions in QE stimulus/PPP loans that went into stock buybacks for no reason).. I don't agree with what he did considering the cost, how *massively* inflationary to fiat it ended up being, and how that created an everything-bubble in all assets that's too large to allow to pop now without killing the US - ie the GOP caused *more regulation* and intentionally sold off all future USD purchasing power away over a quick market pump, not what I want personally- crypto be damned. I trust DeSantis equally as much as I trust Warren. They're both quite toxic in their own ways. I see politics as a game of rich vs poor, and until I'm in the upper echelons of *rich* I'm not in any place to be simping. The only reason either is pro or anti crypto is because the other one chose the opposite approach, I doubt either give a single shit what people want otherwise and they'll do whatever *they* want if elected anyways.
That's PPP (purchasing power parity), which is a different metric than nominal GDP.
That's PPP (purchasing power parity), which is a different metric than nominal GDP.
The ATM's weren't even the problem. They used fake identities and businesses to get those PPP loans to pay for the ATM machines.
I want to name my crypto project *Purchasing Power Procurer* (PPP). Sounds like it could be hyped.
Covid created a major liquidity crisis (when no one would lend $, this is a liquidity crisis) so fed stepped in. They did a few things. One, they dropped fed funds rate to essentially zero. Fed funds governs how much it costs banks to borrow from each other. Two, it lowered the reserve requirements (this is super key) to essentially nothing. This meant for every $1 of money they got as a deposit, they were able to lend it out. Three, to keep rates low they bought bonds and stocks. This is the “money printing” people refer to (also known as quantitative easing). In actuality this is literal intervention into markets (fed buying stocks is nuts) and an attempt to prop up the markets. It worked - the flash crash in 2020 recovered brilliantly in a few months. This is where the fed should have stopped. But powell is a fucking moron and didnt stop. This lead to the crazy bull run in the covid era, when we should have been going through a natural recession (roughly every 10-15 years. Its a cycle). This expansion in money supply along with 2018 trump tax cut and PPP/free covid money is what lead to inflation. Having a 40% increase in money supply in so short of a time (we’re used to like single digit % increases) will **Always. Lead. To. Inflation.** Literally always. We have many many cases of this (see: latin america) and it always leads to inflation. Fucking always. Anyways, back to SVB. This is how banking works: If a bank takes your money, its a liability (debt) to them. When a bank lends you money, it is an asset to them. In the past, fed would require a certain % of deposits be kept unlent and uninvested. This is the reserve requirement. Federal reserve set this to 0 (fucking zero) in march 26, 2020. So lets go back. The money supply went up 40%. When people are all flush with cash, they normally park it in the bank or put it into assets (hello real estate, hello crazy stock market bull run, hello crazy crypto run). But deposits to a bank are **debts.** the bank is now allowed to lend out every $1 they take in. So what do they do? They lend it out. All of it. BUT WAIT - the federal reserve deliberately set rates to ALL TIME LOWS. In history. Since the beginning of time. ALL TIME LOW. Dinosaurs in the fucking jurassic period paid more interest than we did during covid. So the banks’ asset sheets are FILLED with these loans at 2% 3% 4%, etc. Why is this so bad? Cuz loans’ value is **reverse** to the interest rate. What does this mean? A loan is waaay more valuable to a bank when the interest rate is 10% versus 2%. And this makes sense. A bank will collect $1000 a year on 10,000 (10%) versus $200 a year on 10,000 (2%). So 10% loan is more valuable than 2%. Now - what is a run on banks? Its when the bank doesnt have any cash on hand to give to customers when they withdrawal. Thats super duper simple. A bank will **never** ever have 100% of customers’ money as cash on hand. Impossible because then the bank would never make money doing it this way. Never. So all these banks have their money parked in a mixture of loans. Mortgages, corporate loans, US securities (treasury bills - considered “safe”). Ok. So when a bank is suddenly hit with a request to withdrawal 30% of their customers’ deposits, the bank has to quickly raise cash. How? They will sell their loans. But those loans are at 2%…and the current market is 7%. So what does the bank have to do to raise up the $$? They need to **slash the prices** on their loans when they sell them so that it matches the current market rate of 7%. You might ask “well whats the big deal? Its only a 5% difference. Well, look at it this way: its 300% more interest now than during covid. 300%. That means all those loans at 2% are worth significantly less. Like 60% less (actually i’m unsure of the % less - i havent done the math cuz well i’m lazy). Either way, its ridiculous how much less it is worth. So the bank had roughly 300B in assets (i forgot the exact number - i am just using a place holder). When customers started to require 150B in cash, the bank had to sell that 300B in 2% loans but they couldnt sell them for 300B. They sold them for 100B (which is what they’re worth at a 7% interest rate environment). They couldnt make up the difference in time and presto - dead bank. Once again, my numbers are all off cuz i’m not doing the math. But you get my point. This is what happened to SVB.
Not exactly. Covid created a major liquidity crisis (when no one would lend $, this is a liquidity crisis) so fed stepped in. They did a few things. One, they dropped fed funds rate to essentially zero. Fed funds governs how much it costs banks to borrow from each other. Two, it lowered the reserve requirements (this is super key) to essentially nothing. This meant for every $1 of money they got as a deposit, they were able to lend it out. Three, to keep rates low they bought bonds and stocks. This is the “money printing” people refer to (also known as quantitative easing). In actuality this is literal intervention into markets (fed buying stocks is nuts) and an attempt to prop up the markets. It worked - the flash crash in 2020 recovered brilliantly in a few months. This is where the fed should have stopped. But powell is a fucking moron and didnt stop. This lead to the crazy bull run in the covid era, when we should have been going through a natural recession (roughly every 10-15 years. Its a cycle). This expansion in money supply along with 2018 trump tax cut and PPP/free covid money is what lead to inflation. Having a 40% increase in money supply in so short of a time (we’re used to like single digit % increases) will **Always. Lead. To. Inflation.** Literally always. We have many many cases of this (see: latin america) and it always leads to inflation. Fucking always. Anyways, back to SVB. This is how banking works: If a bank takes your money, its a liability (debt) to them. When a bank lends you money, it is an asset to them. In the past, fed would require a certain % of deposits be kept unlent and uninvested. This is the reserve requirement. Federal reserve set this to 0 (fucking zero) in march 26, 2020. So lets go back. The money supply went up 40%. When people are all flush with cash, they normally park it in the bank or put it into assets (hello real estate, hello crazy stock market bull run, hello crazy crypto run). But deposits to a bank are **debts.** the bank is now allowed to lend out every $1 they take in. So what do they do? They lend it out. All of it. BUT WAIT - the federal reserve deliberately set rates to ALL TIME LOWS. In history. Since the beginning of time. ALL TIME LOW. Dinosaurs in the fucking jurassic period paid more interest than we did during covid. So the banks’ asset sheets are FILLED with these loans at 2% 3% 4%, etc. Why is this so bad? Cuz loans’ value is **reverse** to the interest rate. What does this mean? A loan is waaay more valuable to a bank when the interest rate is 10% versus 2%. And this makes sense. A bank will collect $1000 a year on 10,000 (10%) versus $200 a year on 10,000 (2%). So 10% loan is more valuable than 2%. Now - what is a run on banks? Its when the bank doesnt have any cash on hand to give to customers when they withdrawal. Thats super duper simple. A bank will **never** ever have 100% of customers’ money as cash on hand. Impossible because then the bank would never make money doing it this way. Never. So all these banks have their money parked in a mixture of loans. Mortgages, corporate loans, US securities (treasury bills - considered “safe”). Ok. So when a bank is suddenly hit with a request to withdrawal 30% of their customers’ deposits, the bank has to quickly raise cash. How? They will sell their loans. But those loans are at 2%…and the current market is 7%. So what does the bank have to do to raise up the $$? They need to **slash the prices** on their loans when they sell them so that it matches the current market rate of 7%. You might ask “well whats the big deal? Its only a 5% difference. Well, look at it this way: its 300% more interest now than during covid. 300%. That means all those loans at 2% are worth significantly less. Like 60% less (actually i’m unsure of the % less - i havent done the math cuz well i’m lazy). Either way, its ridiculous how much less it is worth. So the bank had roughly 300B in assets (i forgot the exact number - i am just using a place holder). When customers started to require 150B in cash, the bank had to sell that 300B in 2% loans but they couldnt sell them for 300B. They sold them for 100B (which is what they’re worth at a 7% interest rate environment). They couldnt make up the difference in time and presto - dead bank. Once again, my numbers are all off cuz i’m not doing the math. But you get my point. This is what happened to SVB.
This can’t be stressed enough. I think people just assume because we hit ATH for a lot of projects after 2018 that it will happen again. That was due to a once in a lifetime pandemic causing an immediate influx of trillions of dollars pumped into the economy, PPP loans that didn’t have to be paid back, and historically low interest rates all happening at once. I believe in BTC long term but there is even a chance that doesn’t reach ATH any time soon. Especially as the economy crumbles and people don’t have spare cash to throw into speculative assets but need to survive. BTC is really being put to the test now because as the banks fall, we will see if people turn to it as opposed to banks as was its original intention of Satoshi. I know people here only want hopium but they need to be leveled with reality too.
If it was a bailout where the top gets taxed or has to pay, or a CEO tax. I don't think people would mind a bailout. Though.... once again.... some rich folks with more money and power than sense nearly crashed the economy - after wages didn't rise with inflation - after the top made up to 70% more in profits - after we printed 2 trillion dollars for them - after we forgave their PPP loans - after student loan forgiveness was rejected. It's this constant repeat of the same mistakes that are causing people to lose faith with the central banks. I am 35 years old, and I have seen 3 bailouts for our financial system in the past 20 years. What economy needs that? Certainly not one anyone could put faith in. At least while no one faces responsibility for their actions.
Sure they will. Would not at all be hard for the gov to prime that well by giving out a $500 CBDC stimmy to the masses. They get willing adoption, AND an excuse for why the economy is bad for another couple years. See: Covid (non PPP) stimulus. Plebs are still being shit on for that $1200 by the elies
SVB had assets enough to cover ALL the depositors' money, it's just that if they are sold early to cover unexpected withdrawals, they lose a bunch of value (and that's what happened). No new money needs to be printed, the assets were seized. All that needs to happen is that an entity with more liquid capital needs to step in and pay cash where required, to give time for the less valuable bonds to mature. I'm not saying that there won't be any fuckery, or "they" won't use it as an excuse to print more (they were always going to anyway), I'm just saying that at face value, it isn't required in this situation. The feds insistence that this won't cost taxpayers anything is at least "plausible" on paper. Look, I'm as jaded and anti-this-system as the next guy, and I don't think there's any way this doesn't end up in the elites' favour in the end somehow. But on the surface, the mechanism by which they intend to transfer money from the masses to the elites in this case is not obvious (like TARP bailouts and PPP were).
Like the PPP grants were “loans”
Yes, that's correct. But there are easier and less time consuming methods to farm. I consider it an important reminder which is why I share. But it's the concept of banking disintermediation that is most urgent. The Federal Reserve Bank of Dallas recently petitioned to have Working Paper 2218 reconsidered. TLRD: Dallas Fed argues CBDC program is complicated and requires private enterprise-type government. They call it disintermediation to confuse people. It's just outsourcing. I expect they'll apply the same level of care during CBDC initiative as they did w/the PPP rules they took advantage to harass customers. If it happened to me, it can happen to anyone of us in the US.
Yes. The bank rep I spoke to the following week lifted the restrictions. They leaned on the fact that the Govt outsourced fraud review for Paycheck Protection Program to them, and just apply it whenever they saw fit. I wasn't a recipient of a PPP grant, but that didn't seem to matter. When Hayden and I compared notes, it was almost identical. In his scenario, they did drag it out and if memory serves correct, they did ship one of his accounts to the state. Same as the lady in the video, Chase never told me what it was that raised the red flag. It was the attorney who said it had to be the deposit, but Chase never felt compelled to tell me.
When households were getting checks of sometimes thousands per month, plus business owners flush with PPP money and the government shoving money everywhere with REAL interest rates DEEP in the negative, you think that had no effect on crypto? You think that had nothing to do with the S&P doubling in record time? You think that had nothing to do with housing shooting up 100% or more in areas? Ok.
OH I know that. Just what is the point of these agencies if they don’t do their job? I feel like with all these bailouts, especially the scam of the PPP loans, that FTX US customers should be bailed out by the government since the SEC did nothing.
In reality, the citizens are expecting the government/central planners to save them from this mess. The citizens assume that these people are so smart because talk in strange terms like "QE", "QT", "PPP" etc. So they must know this shit so well and the rest of us do not.
Back on popular request, a helpful way to deal with the stress from red charts: >!POP!< >!POP!< >!POP!< >!POO!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!PPP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< >!POP!< *This is the last time. Doing these manually sucks. But I hope it helps you calm down!*
You're responding in a comment chain about taxes though, so that's why I asked. You weren't very clear in your response. While obviously there were some accountability issues, you need to remember that the economy functions on the ease of which money can flow whether its buying goods, paying for services, etc. When the pandemic first hit, the economy basically froze. Lockdowns put the economy in paralysis and jobs were furloughed in no time. The initial goal of the CARES act and PPP was correct--that's why it was passed by BOTH parties with overwhelming majorities. People trying to blame Trump don't get it. Either party in power would've done it. The problem was with the execution. Of course people are going to try to cheat any opportunity at free money. The problem was there was no real way to dole out money quickly and then ensure it's all spent legally. That's why you see so many prosecutions happening AFTER the fact. If you care about money being well spent, the good news is all the fiat spending has a pretty clear money trail. Even KYC crypto can likely be tracked well. Business owners who fraudulently used PPP loans can be tracked down and prosecuted. That's how they're doing it. If we spent all the time in the world doing due diligence, it probably could've been July 2020 and we only disbursed $10 million
You need to read up on it a little more. The original program required 75% to go to payroll over an 8-week period but it was altered significantly to be spread over 24 weeks which allowed it to be hidden. And then they allowed a second round. And also for employees to get unemployment in the meantime. And then made it tax free. Lots of people got very rich from PPP. Do you know many recipients? There is a database where you can see how much everyone got. Most recipients made profits and then kept the free PPP money on top. It was absolutely the biggest giveaway in the history of the world. Keep in mind, most states effectively had no shutdown at all. The media was very specific to New York and LA and skewed things. Although Juniors cheesecake company in NYC pocketed an extra $4 mil tax free.
I don’t have the data, not sure if you do, but if I recall, PPP loans required something like 80%+ to be spent on payroll. There were some loopholes that let larger-than-intended businesses get access to it, but either way I would not say this was a transfer of wealth. It was necessary to keep our economy afloat. Did you see our unemployment numbers? PPP helped prevent a complete economic collapse
I call BS. PPP loans required the borrower to specify the use of the funds and forgiveness was only granted if the loan was used for expenses relating to keeping employees on payroll. Source? In an accountant/ auditor.
The amount of fraud and theft with the pandemic stimulus stuff (PPP especially) is outrageous
If you’re taking about PPP then they weren’t loans. Not even 1% was paid back. It was free money. The greatest transfer of wealth in the history of the world. 1 trillion dollars and it’s completely dislocated the American economy. The labor market is permanently damaged. At a minimum it is a generational problem.
PPP loans, another scam where the rich were once again bailed out. Love how the government gave up so quickly on their shitty idea, but are balls deep in any little thing we sell now.
My ex boss took a PPP loan and bragged he bought Bitcoin with it. Didn't spend a dime on the employees or restaurants. Can I report him?
References Alekseev, G., Amer, S., Gopal, M., Kuchler, T., Schneider, J.W., Stroebel, J. and Wernerfelt, N., 2022. The Effects of COVID-19 on US small businesses: Evidence from owners, managers, and employees. Management Science. Autor, D., Cho, D., Crane, L.D., Goldar, M., Lutz, B., Montes, J., Peterman, W.B., Ratner, D., Villar, D. and Yildirmaz, A., 2022. An evaluation of the paycheck protection program using administrative payroll microdata. Journal of Public Economics, 211, p.104664. Cho, D., Crane, L.D., Goldar, M., Lutz, B., Montes, J., Peterman, W.B., Ratner, D., Villar, D. and Yildirmaz, A., 2022. The $800 billion paycheck protection program: where did the money go and why did it go there?. Journal of Economic Perspectives, 36(2), pp.55-80. Baker, S.R., Farrokhnia, R.A., Meyer, S., Pagel, M. and Yannelis, C., 2020. How does household spending respond to an epidemic? Consumption during the 2020 COVID-19 pandemic. The Review of Asset Pricing Studies, 10(4), pp.834-862. Breuer, M., 2022. Bartik instruments: An applied introduction. Journal of Financial Reporting, 7(1), pp.49-67. Bourveau, T., She, G. and Žaldokas, A., 2020. Corporate disclosure as a tacit coordination mechanism: Evidence from cartel enforcement regulations. Journal of Accounting Research, 58(2), pp.295-332. Billings, S.B., Gallagher, E.A. and Ricketts, L., 2022. Let the rich be flooded: the distribution of financial aid and distress after hurricane harvey. Journal of Financial Economics. Corgnet, B., Hernán-González, R., Kujal, P. and Porter, D., 2015. The effect of earned versus house money on price bubble formation in experimental asset markets. Review of finance, 19(4), pp.1455-1488. Chetty, R., Friedman, J.N., Hendren, N., Stepner, M. and The Opportunity Insights Team, 2020. How did COVID-19 and stabilization policies affect spending and employment? A new realtime economic tracker based on private sector data (Vol. 27431). Cambridge, MA: National Bureau of Economic Research. Coibion, O., Gorodnichenko, Y. and Weber, M., 2020. How did US consumers use their stimulus payments? (No. w27693). National Bureau of Economic Research. Coibion, O., Gorodnichenko, Y. and Weber, M., 2020. Labor markets during the COVID-19 crisis: A preliminary view (No. w27017). National Bureau of Economic Research. Courtemanche, C. and Snowden, K., 2011. Repairing a mortgage crisis: HOLC lending and its impact on local housing markets. The Journal of Economic History, 71(2), pp.307-337. Faulkender, M., Jackman, R. and Miran, S.I., 2020. The job-preservation effects of the paycheck protection program loans. Office of Economic Policy, Department of Treasury. Working Paper 2020-01. Fishback, P.V., Flores-Lagunes, A., Horrace, W.C., Kantor, S. and Treber, J., 2011. The influence of the Home Owners' loan corporation on housing markets during the 1930s. The Review of Financial Studies, 24(6), pp.1782-1813. Goldsmith-Pinkham, P., Sorkin, I. and Swift, H., 2020. Bartik instruments: What, when, why, and how. American Economic Review, 110(8), pp.2586-2624. Granja, J., Makridis, C., Yannelis, C. and Zwick, E., 2022. Did the paycheck protection program hit the target?. Journal of financial economics, 145(3), pp.725-761. Hubbard, R.G. and Strain, M.R., 2020. Has the Paycheck Protection Program Succeeded? (No. w28032). National Bureau of Economic Research. Li, L. and Strahan, P.E., 2021. Who supplies PPP loans (and does it matter)? Banks, relationships, and the COVID crisis. Journal of Financial and Quantitative Analysis, 56(7), pp.2411-2438. Makarov, I. and Schoar, A., 2021. Blockchain analysis of the bitcoin market (No. w29396). National Bureau of Economic Research. Thaler, R.H. and Johnson, E.J., 1990. Gambling with the house money and trying to break even: The effects of prior outcomes on risky choice. Management science, 36(6), pp.643-660. Xiong, W., 2013. Bubbles, crises, and heterogeneous beliefs.
"Trading volume is significantly associated with PPP, as well as measures of congestion such as hash rate and miner revenue: for a 100% increase in PPP disbursements, the cumulative trading volume increases by 9.6%, hash rates increase by 4%, and miner revenue increase by 23.32%"
" 1. Introduction During the outbreak of the COVID-19 pandemic, the US government passed unprecedented stimulus spending. While the stimulus helped American families and businesses stay financially afloat and mitigate the economic downturn, it also increased demand for various assets used as a store of value when consumption was artificially restricted. The overall period corresponds with a jump in the price and number of cryptocurrencies newly created. After the passage of the $2.2 trillion CARES Act in March 2020, the prices of cryptocurrencies such as Bitcoin and Ethereum were up by roughly 450% and 1,500%, respectively, in June 2021. Our study aims to empirically evaluate whether the government aid achieved its stated goals by investigating the effect of the paycheck protection program (PPP) on the crypto markets. Addressing the above issue is of evident importance to policy making. **The Department of Justice reported several cases where PPP loans were misused to buy cryptocurrencies.** 1 Government aid aims to provide emergency support to individuals and businesses to alleviate the adverse effect of the pandemic on the economy, not to store long-term value in crypto assets. Because the existing crypto assets are in limited supply, new investors receiving aid bought crypto assets from other investors with prior ownership of the assets. Consequently, the existing supply was supplemented with new tokens and coins minted during the period by sophisticated intermediaries (Makarov and Schoar 2021). Therefore, the adoption of crypto during a period of extraordinary state aid suggests that the aid was effectively transferred from taxpayers to wealthy or overseas investors supplying crypto assets. Crypto assets are unique among many other risky assets by having the following characteristics (Xiong 2013): unlike other assets such as real estate or financial securities as defined by the SEC, they are not defined as claims on real assets; being based on beliefs about future prices, they are difficult to value and highly volatile; they are part of relatively new and unregulated segments of the financial industry, which are more prone to bubbles; and they are difficult to short sell without taking potential counterparty risk. A significant portion of the aid can be at risk, especially when the demand for crypto by new investors is tapered by lower savings and a return to normalcy in consumption habits."
"Abstract This study examines the impact of government financial assistance during the COVID-19 pandemic on the demand for crypto assets and the effect of crypto interest on the stated goals of stimulus programs. Government lending to small businesses (PPP) significantly increased households’ interest in crypto assets. Using a Bartik instrumental variable for PPP distribution, we find that a one standard deviation increase in PPP disbursement is associated with an increase in crypto-related Google searches. A 100% percent increase in PPP disbursements is also accompanied by a 2% increased number of new wallets, 10% higher trading volume, 23% higher miners’ revenue, and a shift from large to small addresses, suggesting that government assistance increases the demand for cryptos, particularly among new, retail investors. We further find that about 5-14% of PPP loans are diverted to crypto assets, rendering PPP less effective in maintaining employment. Our results are stronger for MSAs with a less educated population, supporting a house money explanation."
Of course they are. Every gov is. When people learn about bitcoin and begin to understand it, they also learn how they’re being robbed slowly through inflation. Check out the results of the PPP program if you want a good example. Why are entry level workers making the same nominal wage as 20-30 years ago? Why has healthcare, college, and home prices went hyperbolic since then? Weird, huh?
Oh no, this IS how they intend to recover the PPP loans. It’s just that the public will foot the bill rather than the companies which got the loans.
Yeah a backlog that is constantly growing. They couldn’t even do anything about the massive PPP loan frauds, they’ve forgiven like 90+% of all the loans, literally free money, how are they gonna catch the ridiculous convoluted mess that is people’s crypto tx history? Add in defi, mixers, privacy coins, and non-kyc exchanges, jesus I do not envy those workers.
No, they meant booming economy from corporate welfare like the $1T unfunded tax cuts followed by the additional $1T of free PPP money that was never paid back. And then whatever else we paid for with the $12T printed and injected in the economy from Mar 2020 to May 2020. https://fred.stlouisfed.org/series/M1SL
Your explanation would be true if there was sufficient competition, where firms are competing on price. There is hardly any competition in America anymore because anti-trust law is severely out of date, or simply not applied due to regulatory capture. It's been well documented for decades now that this consolidation has been going on. M&As have been happening since the 80s and it accelerated a lot recently in the last 10-20 years. Anyway point being, even if you're a small business in America, many of your suppliers are VERY consolidated and they can and do fix prices all the time, hence you must also raise your prices. For example, if you run a restaurant, chances are you buy paper or plastic products\` from Sinclair. If they raise prices 10% then you will only be able to absorb so much of that. However, what actually happened was due to both of the top reasons in the survey (spending, and corporate greed) along with pretty substantial changes in the labor market. Boomers are retiring. The pandemic and child care costs forced a lot of people into being home makers. Trump kicked out a bunch of H1Bs. All together the labor market is tight and so they have more bargaining power. Beyond that the PPP loans that were handed out and forgiven also contributed A LOT to inflation in vehicles and properties. Of course Senators and their friends were first in line for that money. The handouts to average people really didn't increase inflation all that much. It was more that resource scarcity, being locked in at home, and higher wages are driving more consumption while there is less material to consume. Hence more competition for that consumption (i.e. people are willing to pay more to get what they want). I mean we also had a pretty shocking black swan there with the pandemic. People instantly switched off services and towards buying stuff online. Then when the lockdowns lifted suddenly they're right back to spending more on services and less on goods again. This is after a bunch of REAL small business owners that provide services went bankrupt so there is less competition offering the same services now too.
It wasn’t just stimulus checks. You had PPP ‘loans’ that basically turned to grants, you had family tax credits, a pause on mortgage payments, and a pause on student loan payments, which is still in effect. Overall, the stimulus was closer to $5 trillion that was pushed into the system, or unencumbered, in a very short amount of time.
Why don’t we look into where all those “forgivable PPP loans” went first? I dunno. Sort of seems important.
Due to government stimulus, the economy was strong in the 2021 bull run. Sucked if you were a small business owner who didn't get PPP loans. Great for almost everyone else. Poverty dropped. Median household income rose. The 2021 bull run up to Matt Damon recruiting bag holders during the superbowl is a reason *for* thinking macroeconomic indicators are important.
Did you mean to respond to someone else? I don’t see anyone talking about stimulus checks (which are actually mentioned in the paper you linked, btw). Side note: the government/treasury would not be thrilled to have you return a stimulus check for a few reasons. One, it’s a pain in their over-bureaucratized asses to reverse disbursements. I’ve seen this with the Dept of Veterans Affairs (who issue payments directly from the US Treasury Dept) and with people receiving welfare/SNAP. It can be hard to get money out of the government, but once achieved it is hard to reverse. Two, the checks were meant to stimulate the economy and were never intended, designed, or sufficient to alleviate financial hardship (that was attempted through PPP and increasing welfare payments). The implications of the article you posted are very interesting tho. For example, the Fed/Treasury could one day immediately disburse money to the public as well as.. um, “unimburse” the public to control for inflation. Tho the latter will probably not be feasible in our lifetimes, if ever.
We need Covid relief funds and PPP loans again
Flashbacks to forgiven PPP Loans $800K free
It's funny how no one mentions the far larger amount spent on PPP loans that never had to be paid back, a huge percentage of that straight up fraud.
We do this song and dance every year too. Republicans say we are spending too much, democrat propose a wish list of everything under the sun. So that the middle doesn't seem so bad. But ultimately. Republicans who say we are spending too much are right, but that is the cost of running the USA. If we really did care about that though, we could look into those PPP loans. And suddenly it doesn't matter anymore. Democrats have great ideas but ultimately their solutions solve symptoms not causes of wealth inequality. It doesn't matter if I get my taxes for free next year if I have to pay those taxes I would have spent to some billionaire cooperation who is overcharging me for gas, cell phones, cell phone service, car insurance, medical insurance, rent and housing, So on and so forth.
FDIC protects consumers. It's tax money, sure, but it's like the difference between enhanced unemployment benefits versus PPP loans. The former directly helps individuals, while the latter was issued with the intent of helping individuals. The PPP loans were taken and workers were still laid off, so they still collected unemployment, and businesses kept the PPP. I know they are supposed to repay if they don't use it for payroll, but do we really think that's what happened? Cut out the middle man and let businesses succeed or fail on their own. Too big to fail? Hardly. Other institutions can pick up the slack (and profits). We ended up in a recession anyway, so what's the difference? When other corporations see the lack of a corporate safety net, I'm certain they'd ensure their business practices don't result in the same outcome.
Cool. Let’s see the US government do that with all the illegal PPP loan fraud and use it to fund student loan relief.
Those 200 million people have the same combined PPP as Taiwan… not really as significant when you take that into account.
>Corona owned a cryptocurrency company called HODL that operated bitcoin investments. The Justice Department alleges that Corona "knowingly and willfully devised and intended to devise a scheme to defraud and to obtain money and property by means of materially false and fraudulent pretenses," according to the indictment I've never heard of that company before, but my first though is why would people give money to a company called "HODL"? lol >Corona obtained $413,804 in PPP loans through two third-party lenders using alleged false information about HODL's payroll data. He claimed on application forms that his company spent $82,760.55 on payroll expenses for a staff of nine employees That's probably what put the nail in the coffin for him
The goal of any company is making money (greed), so yes they function off greed. And you are correct, some companies banked during the pandemic, however, some struggled and a few went under. Regarding PPP, I don’t believe companies should have taken it if they there were profitable. But don’t forget that salaries are also at all time highs (which helps the average worker afford paying 50% more for chicken).
And businesses raped the ever living shit out of it. My company's business went UP during the pandemic, by a lot, and there still took PPP money and replaced the entire roof on our building. But like you said... Business functions off greed.
It's kinda expected tbh The current macro environment is pretty hostile to risk-on investments. Back in 2020-2021 there was near zero rates and near infinite money printing in the form of stimulus, unemployment, PPP, etc
Yes, Luxembourg, officially the Grand Duchy of Luxembourg, is a small landlocked country in Western Europe. It borders Belgium to the west and north, Germany to the east, and France to the south. Its capital and most populous city, Luxembourg, is one of the four institutional seats of the European Union (together with Brussels, Frankfurt, and Strasbourg) and the seat of several EU institutions, notably the Court of Justice of the European Union, the highest judicial authority. Luxembourg's culture, people, and languages are highly intertwined with its French and German neighbors; while Luxembourgish is legally the only national language of the Luxembourgish people, French and German are also used in administrative and judicial matters and all three are considered administrative languages of the country. With an area of 2,586 square kilometers (998 sq mi), Luxembourg is one of the smallest countries in Europe, and the smallest not considered a microstate. In 2022, it had a population of 645,397, which makes it one of the least-populated countries in Europe, albeit with the highest population growth rate; foreigners account for nearly half the population. Luxembourg is a representative democracy headed by a constitutional monarch, Grand Duke Henri, making it the world's only remaining sovereign grand duchy. Luxembourg is a developed country with an advanced economy and one of the world's highest GDP (PPP) per capita. The city of Luxembourg was declared a UNESCO World Heritage Site in 1994 due to the exceptional preservation of the vast fortifications and historic quarters. Luxembourg is a founding member of the European Union, OECD, the United Nations, NATO, and the Benelux. It served on the United Nations Security Council for the first time in 2013 and 2014. As of 2022, Luxembourg citizens had visa-free or visa-on-arrival access to 189 countries and territories, ranking the Luxembourgish passport fourth in the world, tied with Finland and Italy.
> Real estate A bit of a personal story, but I want to buy my house from my landlord since he came to me and told me that he can't afford to do any major repairs or upgrades to the house I live in. I'm willing to pay closing and 20% down out of pocket instead of just paying rent to him, but first I want to figure out what he wants to do The thing with real estate is that the market was red hot before, but it's starting to cool off alot. Plenty of homes are starting to drop in value now, and it's rare to see houses selling for 20k-50k+ over asking price compared to back in 2021. Also i'm guessing mortgage rates will keep rising in the near-term too, just a bit slower than before >Stocks Personally, i'm waiting to 2023 to make any major moves regarding stocks. I have a bunch of monies that I put aside each month this year that I want to throw into the market, but it feels like the market isn't done dipping yet. There's quite a few stocks that are way up compared to their prepandemic valuations, and the environment is way different now compared to back in 2021 >Crypto I'm still buying into crypto, but it still feels like crypto can drop alot as well. Crypto is bigger than my stock investment portfolio, but i'm planning to keep adding crypto, and then taper off and lower my investment amounts in late 2023 - early 2024. If the 4 year cycle repeats, i'm hoping to take profit during the next bull market (although there's no guarantee, but i'm hopeful for a 2024-2025 bullrun) The issue with all 3 of those investments is that every single one of them, real estate, crypto, stocks, oil, lumber, etc all rose because of an infinite money printer (i.e PPP, covid stimulus, unemployment, etc) and the rates were near zero. That led to a massive bubble since borrowing money was so cheap and it was so easy to get, but now the fed has been hiking rates to combat inflation caused by it, so it's likely that the pressure on risk-on assets will continue Also risk management is important and it's probably best to do an allocation that you feel comfortable with
Being able to file, much less qualify for *multiple PPP loans* would seem to require already being rich*er* than quite a large slice of the population.
I agree, but the people that took the money weren't all rich people, at least not before they took the PPP loans lol. I figured the fed would drop the hammer.
AMC feels like it has some ways to fall still. It was hyped up over there on WSB and people basically fomo'd into it. Nkla feels more like a sound bet compared to AMC since electric cars will most likely be around for a while. But also I feel like the entire stock market has some ways to correct still, especially in the current environment Back in 2021, the thing about the stock market (and pretty much all asset classes) is that the environment was way different. When covid was on all the airways and Powell was screaming "Inflation is transitory" from the rooftops, the governments of the world was constantly printing money in the form of stimulus such as stimulus checks, PPP, unemployment income, etc. The economy was flush with cash and the fed lowered interest rates to near zero to encourage borrowing, which allowed people to take out nearly endless cheap loans. That helped to prop up the everything bubble, but now that rates have risen and several measures have been taken to try to combat the inflation caused by the endless money printing and low rates, that's been putting pressure on risk-on assets such as stocks
Traditional markets were propped up artificially by back during covid due to the infinite money printer (i.e stimulus, unemployment, PPP, etc) and near zero interest rates. It's a different market now and stocks are beginning to adjust TLDR : Powell basically created the biggest bubble in history by saying "inflation is transitory" which encompassed all asset classes and now he's scrambling to tame inflation after making that call
My understanding was the PPP were loans that were backed by the Small Business Association funded by lenders. So a bit different in origination then raw printing money. Some loans were forgiven, so don’t know details on how that was worked out!
Source for when they did that with PPP loans? From everything I can tell, that is not the case here....
Come to find, I may or may not have had a client that took out *multiple PPP loans* and may or may not be under current investigation for such. On one hand, game respect game? On the other, how stupid greedy can you fucking be?!
Man, those PPP Loans were a once in a lifetime grift, I mean gift. I wish I had known that I could just take out like 5M and not have to pay it back. ​ /S
Just have a look at the staggering amount of obvious PPP loan fraud. That scheme was designed to provide rich individuals who didn't need it free money.
If it's a small amount then nah, but a rising tide lifts all ships usually. It also comes down to your individual circumstances and how much risk you want to take on though For example, if I put $1000 into Bitcoin at a current price of $16k and Bitcoin went to $160k, that $1000 would be worth $16000. If I threw it at an alt and considering alts usually rally alongside Bitcoin, that $1000 could be worth $25,000-$30,000+. The risk is higher, but so is the reward (RR also scales the further you go down in marketcap) Also there's no guarantee that Bitcoin will 10x from here. Back in 2020-2021 we had covid going on with a infinite money printer (i.e stimulus, PPP, unemployment, etc) and near zero interest rates. Depending on the future environment, it might be harder for Bitcoin to go 10x during the next bullrun, especially when you can get good returns outside of Bitcoin now, and without the risk of holding cryptocurrency (i.e I-bonds and HYSA rates have been killing it lately)
My morning rant in replying to a request from PNC bank: Hi Tiffany, Amazon assigns invoice numbers to transactions. This is simply an invoice identification ID. This invoice was for customs duties and taxes shipped to Canada. I'm not sure how Amazon assigns these numbers, and I don't want to spend hours on the phone trying to figure it out with a support person from India that is a representative of a corporation (Amazon) that is solely responsible for the largest exfiltration of wealth in American history and actively facilitates direct trade with China via and in collusion with the United States government. This for example is reflected in the same corporate culture that would allow your esteemed company PNC to favor their largest customers when tasked with providing PPP loans to businesses during the pandemic. Corporations are systematically targeting American small businesses like mine for extinction. The only way we will stop this red and blue infighting in America is by targeting corporations like yours and going to war with passive income. Didn't we learn from 2020 that the stock market is a sham grounded in leprechaun gold and pixie dust? How about this for irony from our friends at the NASDAQ Here’s Why Bitcoin Will Fail | Nasdaq? How is Bitcoin any less made up than the American stock market that is based on absolutely nothing? Don't believe me when I tell you that Amazon is directly facilitating Chinese trade with our government? Find the attached PO from a school sending government $ directly to China as facilitated by Amazon. How is this possible? Want more irony? Amazon fought numerous lawsuits in the US court system representing that they were absolutely not the sellers in 3rd party transactions and not liable for their products. Is Amazon Liable For Third-Party Sellers Products? See the conflict? When it comes to selling to the US government, Amazon gladly accepts those government Dollars and represents that they are the seller while simultaneously fighting lawsuits on public record stating that they are absolutely NOT the sellers in these 3rd party transactions. Corporations are incapable of reflecting the values of the American public because they serve only the shareholder interest. A disproportionately large percentage of corporate shareholders are fat bastard wealthy and no longer contribute to our society in a meaningful way other than to corrupt and exploit the hard work of people like you and me. I was hoping to gift my small business to my children when I'm done, but after Amazon is done a\*s raping my company I'm not sure what will be left. Sorry for the rant. Rough morning. I'll go back to being a peon in a broken cog...
That is why PPP inflation is 300%. The year before there was a strong deflation.
I mean I get what you're trying to say but pretending Europe isn't an economic superpower is just naive and sad. You can make the point of fiat not always being stable with much better examples than the Euro. I mean the United States and European Union are the two largest economies globally in nominal terms. As of 2021, both together share 42.4% and 30.7% of the entire global GDP in nominal and PPP terms, respectively.
Probably not since back during the early days of covid virtually every major country was giving stimulus checks. Also there was a infinite money printer giving PPP money, UE money and other stimulus+near zero interest rates
Let’s not pretend politicians supporting fraud is limited to any or either single party. Remember the PPP loans were a whole order of magnitude larger and were also rife with fraud; not to even begin to touch on all the mortgage fraud shenanigans that were allowed in the run up to and the aftermath of the housing market crisis in 2008. The whole point of divide and conquer is to create squabbling between the masses so the rich may get richer, while everyone else is distracted arguing amongst themselves.
Nice. Many countries had "use it or lose it" government money giveaways. The US and Italy I know the detail, but I assume it was widespread. PPP and EIDL grants in the the US - we give you money and you must spend it on your own business. Italy had money they'd give you for spending on house repair/improvement. China gave money to people to spend at local businesses? Cool. Is China also scary? And digital currency scary? Yes and yes. True post, but it does pretend like China is a special case.
Still odd that we use nominal GDP to compare US and China. We should be using GDP adjusted for PPP as it is a much more useful metric. Using that metric, China has already surpassed the US, which makes a lot of us more hesitant to move on from nominal GDP.
They should have clawed back all of those PPP loans instead of forgiving them. They're worried about me *laundering* my mum $600 to pay her rent, and not worried about the barbershop who was just given $440,000 no strings attached? Wen riots
> This is a rather central disagreement between us. I think that recessions, while a healthy and normal part of the business cycle, can also lead to massive suffering and political instability. Hence policymakers should manage the fallout and stabilize asap. Like we tried not managing the great depression and it was terrible. I’m not sure what more I could say on this. I’m going to agree to disagree on this as well. I think it just kicks the can to somewhere else. > Corruption is bad and if businesses misused that money, that should be investigated. But giving people unemployed people an income is good for the economy, they spend all that money which helps fuel local business. We do it anyways, covid was just a lot more. Covid without subsidies would have been great fun, eh? Putting money in the hands of employees is IMO a great thing to do to help stimulate things. However, PPP was what I was referring to which out the money in the hands of the employer, which did not trickle down to the employee. > Invalid premise. There were no major problems with mo (other than moral hazard) and m1 as you call it. The risk of shit-tons of people being unemployed, unable to work, stuck at home angry is very apparent though. A lot of democracies fell to Communism or fascism through basically this process of economic collapse throughout modern history btw. But this is my point, we haven’t inflated the m0 base supply at this rate in the history of the FED. We have no data to know if this is moral or not. So while I agree it’s a “invalid premise” it can go to say that your take is also invalid on a lack of data. Correlation does not mean causation (just because we haven’t seen the risk doesn’t mean it’s not there). > Economic meltdown is really bad, see my previous comment about our fundamental disagreement here. I just think overall that you really need to defend why the 2008 crash would have been better for everyone, had it actually been 100x worse. I agree it’s really bad, but I am a firm believer in justice, which propping up fraudulent businesses is not. I think in the long run, this crash would have been healthier to run it’s course. I think you are going to have to show me an historic example of how this has worked, because to my knowledge this has never been attempted so it’s very soon to act like this was a risk free way to de-risk the entire economy. I’m saying this, because I can show you many many examples where bad paper was absorbed and bankrupted a perfectly ran company. I do agree we are having a central point where we both disagree. My thing is, I can almost guarantee this risk didn’t magically disappear and it still exists and some poor generation is going to get fucked by it at a level much higher than we would have had to endure. Saving 1 baby now is all fine and dandy but if that 1 baby goes on to grow up and kill 10 babies it was a net negative. > Your premise seems totally disconnected from anything I’ve read about this. Loans to businesses that went bankrupt have been handled already. Most of the money was supplied directly to people via subsidies , not loans. That has already circulated throughout the economy through normal business and stuff. Do you have a legit source? (No zero hedge please) https://gcfp.mit.edu/wp-content/uploads/2019/02/BailoutsV12.pdf Summary: https://mitsloan.mit.edu/ideas-made-to-matter/heres-how-much-2008-bailouts-really-cost And https://gcfp.mit.edu/wp-content/uploads/2019/02/BailoutsARFEConferencePresentation.pdf Key points: Capital infusion was about 65% while subsidies where only 35% So while subsidies where used, it certainly was not “most” of the money. Liabilities such as insurance had to be beefed up. These don’t show up until the risk shows back up. Transaction accounts got unlimited insurance and FDIC a got boosted to $250k. If these ever have to be used, we will print an endless amount of money to cover this hole. Some of the biggest companies that should have went under are still to this day under a federal conservatorship. FHA(federal) mortgage loans needing to be bolstered. Point is, the bailouts where NOT just subsidies, the great bulk of the bailouts where garauntees and capital infusion. I believe the guarantees given are where the risk lies. Other people believe it’s the bundled capital infusion that created the m0 supply to look like a short squeeze chart where these will never be paid back(hence why that m0 chart has not gone down as they where not subsidies like you implied). If it was subsidies the FED would be running on a m0 and m1-4 surplus meaning they would be going DOWN if those subsidies truly paid off through normal business practices. Which it hasn’t. > Is inflation from sending murder robots to kill enemies in far distant wastelands ‘good inflation’ ? What about sending mosquito nets to African villages? I don’t really grasp your good / evil inflation concept. Inflation is just inflation no? Slight inflation (2-3%) is healthy. Being deflationary is dangerous and so is hot inflation above 5% for sustained periods. That’s what I mean but good vs bad. You need some inflation if your GDP is growing like it has been for us. > The world is not crypto. Stock market and commodity trading regulations are a thing. I think you’re extrapolating crypto disaster / liquidity risk to the real world economy without taking into account the greater regulation that dirty fiat central authorities can enforce. I’m simply mentioning crypto as it is the most risky asset class. I could mention SPACs and warrants as well but with the recent events crypto is much easier to explain. Crypto also is a great example of letting the first domino fall and to truly see all the contagion that was to come to get rid of bad business. Crypto is currently shedding the bad business and will come out of this much stronger, rather than propping up 3AC, FTX, genesis, and Celsius and hoping for the best. Do we really think infusing capital in those companies would have been good for the space? I don’t think so. Additionally, if we propped up Celsius or 3AC we may have never found out FTX or genesis where insolven and running bad business. > Covid, suez canal, and now war in Ukraine had a little to do with that inflation. Along with tax cuts and other fun fiscal adventures mentioned above. I agree with this. But only one of those examples increased the m1 supply which is why I’m implying it had a much bigger impact. > The government basically bought all those subprime mortgages through TARP. They injected capital to the markets through QE. TARP removed the stuff at the heart of the problem from the market, which eventually recovered in value and was collectively profitable for the govt (icky but necessary, like a temporary nationalization of trash loans). The QE solved the trust and liquidity issues which stopped the economic collapse. Now those mortgages have been properly valued, and there are new rules (dodd frank) and new watchdogs (cfpb) to prevent that situation from recurring. The problem wasn’t just the loans, it was the house of cards built on top through opaque and poorly understood, risky products (which were then collateral for yet other investments). I agree with all of this. Except the risk wasn’t simply removed. It was moved temporarily and the risk is somewhere out there still. Could be in the federal guarantees. Could be in inflation, could be in something we have never heard of. But that risk was not magically removed and just burned. It’s still there, somewhere.
That's nothing. Lauren Boebert received a $300,000.00 Dollar TrumpVirus PPP Loan that was Forgiven. I wonder if this was Legal.
I want to thank you for a thoughtful discussion. I really appreciate your replies. Not too often can I receive a valid perspective with good ooints being made. Anywho, here’s some answers to some things you listed above. > Again, the alternative is that the entire financial sector crashes, and healthy businesses outside if it get wiped out. You can look at the UK and their abysmal economic performance during Austerity as a rough comparison for this strategy. Having a longer, more painful recession for no reason, did not really help them out later. I would argue, we have done exactly this before the 2000s and been plenty fine in the long run. However, I would not say that increasing M0 supply had no risk like this implies. It very well could have just can kicked and we will see it rear it’s ugly face down the road that could arguably be worse than just letting the markets play the course. It’s very hard for me to argue a risk that hasn’t happened yet, but I will do my best to explain my reasoning below. While increasing M0 supply has had little Tangible effects other than keeping bankers from being held accountable, doing this same scenario with m1 saw much more increasing risk approach much faster with inflation (due to PPP simply “proofing” money into small businesses with absolutely zero oversight which in turn just poofed money into private individuals accounts) so how is the risk apparent (rather quickly as well) in a m1 scheme but not in m0? I’m here to say that risk just hasn’t occurred yet as we haven’t truly in acted the mechanism that triggers that risk. We just started QT, so the question is, where did all the bad paper go that rising interest rates will start “calling” this bad debt? You can say some of it was bought by the FED and absorbed on their balance sheet, but that just makes the fed insolvent and have to pivot back to printing money to cover the huge hole they have from absorbing that bad debt. Additionally, we have ZERO idea on exactly what was bad debt as we didn’t see the contagion spread completely. For all we know the feds balance sheet from the purchasing program is only half of the bad debt circulating. Rising interest rates we are seeing right now is the risk everyone has been talking about, what else was purely wrapped up shit that people overlooked? Well my theory is we will find out exactly what that is soon once these companies that got these products dumped on them realize they can’t service their loans due to these holes created by the same banks we propped up. > Note: if you’re truly worried about inflation, you should be concerned about the Bush / Trump tax cuts and the wars in Iraq and Afghanistan, which massively increased the deficit. Its weird to talk about inflation without mentioning those big ticket fiscal catastrophes. I’m more worried about bad inflation than inflation itself. Inflation isn’t always a bad thing. You make a great point with the deficit caused by the war and trump/bush tax cuts(especially the timing of them couldn’t be any worse). Only pointing out that not all inflation is bad and I agree that the inflation caused by these as well are a form of “bad inflation”. > I agree wholeheartedly. This is unfortunately not a new pattern, poor people have always gotten the stick in the USA except from like 1930-1960 (well, the white poor had a brief reprieve). I agree with the general statement but the fact of the matter is that the wealth gap has increased exponentially since those times while productivity has increased exponentially. We can’t compare workers now to previous generations since on paper they are more productive, generate more profit per worker than ever all the while being equal or in most cases worst off than the less productive generations before them. > The risk is moral hazard, ie that the wall street bros who should have been financially murdered to hell for unsecured risk taking, instead skipped out on a bridge of government relief (TARP for the toxic mortgages, then QE for general financial liquidity). This is universally acknowledged as an awful thing, and in fact had a big impact on crypto speculation and scams. It’s just the alternative was absolute carnage on everyone else. I think I explained above well enough to try and walk you through my thoughts on how it’s more of a risk having not presenting itself quite yet vs there being no risk at all. I am however glad you mentioned crypto in all of this. Crypto has been the first place to see the aforementioned risk rearing it’s ugly head. Once money went from cheap (down right risk free borrowing) to expensive, we almost immediately saw crypto catch the contagion and tail risk of the FED intervention. The ocean of easy money dried up and we saw just who was swimmming naked in the crypto space. This will continue to happen all over as rates rise. Crypto saw it first as it is the riskiest asset class. My question is, with all this bad debt and no way to truly know if the fed absorbed it all(which is another problem if they did). Who else is going to called if rates rise and hold even longer? Who’s holding that 08 and Covid dog shit wrapped up as gold? For Covid it was people holding almost any currency. So it’s quite apparent to me that these policies include a huge risk. I mean we saw the worst inflation on record from just shifting the same policies form m0 to m1. Where the hell did that risk go from m0? To me it seems like your argument tends to downplay that risk of not existing or being very little. My experience in finance tells me if that risk was there it wasn’t just de-risked by magic. Anytime you de-risk you are moving your bad paper to someone else to position yourself better. Where the hell did we put that risk? If your answer is solely the FED I want to know how exactly you figured out every single risk factor from the last 20 years was ear marked and absorbed. Even if that very unlikely scenario happened, we still have an insolvent fed with such enormous debt that the only way to de-risk is by inflation OR taxing everyone to the gills (talking about 80% of everyone’s income being taxed including all corporations profits for the next 40 years). Go pay it off. The FED painted itself into a corner. People thinking that they didn’t are only looking in the past 10 years of finance which should have never happened if they didn’t and I would not be talking about entire sectors of the economy and overall markets becoming insolvent in the future. What these people fail to explain to me is how did we de-risk? I would like to challenge you to to find a single scenario in the past 100 years where someone successfully de-risked without putting their risk on someone else. It has never happened and the FED has put that risk somewhere else that I myself can only speculate on exactly where it is. If your answer is that it all went to the fed balance sheet I would like to know how they de-risk without transferring this risk back to the overall markets and common people?
That's literally nothing it's a drop in the hat compared to the PPP and all the other trash they just gave rich people.
Yeap I was just watch American greed and couple who basically scammed folks and government PPP program for tens of millions of $ got a parole from the judge. Even though they were recorded discussing getting visas and tickets to escape.
I threw all PPP loans into AVAX, turns out didn’t need the money, government didn’t want it back so I guess it’s going into the Casino
I’d say that bull market returns when the free money comes around again. During Covid, governments were throwing money around left and right. Covid Stimulus money. Extra child tax credits. There were unemployment benefits which, for many people, were more than what they were making actually working. Then you add in the suspension of paying back student loans. Throw in some of that PPP money… Trillions and trillions in were injected into the economy. People didn’t know what to do with this free money, so they got loose with it and “invested” into this crypto arena, hoping it’ll be like hitting the lottery. That money is drying up, so crypto value is falling. So, until the economy improves and free money opens up again for people to start buying useless “electronic coins,” I wouldn’t expect too much of a bull market.
I wonder how the guy who put $497,000 of a PPP loan in to bitcoin 8 months ago is feeling?
It's just money, 120K in debt is nothing in the grand scheme, but it does depend on the interest rate he has on it. I think his long term outlook is good if he can sustain the turbulence and satisfy the debt, but if this is credit card debt at 20% or something similar that's very stressful as he needs the crypto market to maintain previous performance and behaviour to come out on top. There's a few strategies he could employ here, and it's probably the best time in our lives to hold low interest debt as the dent is essentially inflating away in terms of PPP. I'd suggest he figure out how to get the debt to the lowest interest rates possible, whether that means transferring some of it onto a new card with a balance transfer interest freeze, engaging in a lower interest payment plan with his provider, or consolidating the debt with another lender. In either case he's a young person with a stable job, to buy a house many young people take on hundreds of thousands of dollars in (lower interest) debts, which may or may not appreciate, and often have very large associated costs. If he's in BTC then he's holding the best performing asset of the past decade, if he's holding some shitcoins then yeah, they could go to 0 and it could be a write off. In either case you can only focus on the actionable steps here, what I would strongly recommend against is telling him what to do outside of getting the interest and repayments to the healthiest place possible if he doesn't want to exit at a loss.
Bored ape think people still spending like they have that PPP money.
80 years of printing money to go to war holy crap George W made sure to delay paying for Iraq until 2011 or something - first bailout under Paulson former wall st chum Obama bailout to “save” Detroit lol Trump and his PPP program my god Biden doesn’t even know what day of the week it is
I can def get behind that. Tax code is just something that they take advantage of though right? They don't set the policy or write the code. That's an IRS thing i think? ​ The PPP shit is just atrocious. I heard about a guy in Pensyl that got $9 million and he spent it all renovating his estate and playing golf. None to employees. Makes me sick. Same shit with the airlines. The shit with congress and the insider trading/ taking loans should be instant jail time, no trial, and all money confiscated for reparations. Also should be forced to work for minimum wage the rest of their lives. Make an example of them.
Pardon my lack of a point. I'm just saying that the wealthiest are the recipient of tax write-offs as well as other benefits that small businesses are left out of. PPP loans were supposed to help small business to support employees and ended up going to businesses like the airlines who took the money and still laid off employees, they used it to buyback stock and don't have to pay them back. While many small businesses were unable to get them and went out of business. Many members of Congress took the loans and straight up pocketed the money and don't have to pay the loans back.
it's fucking ridiculous how many members of congress had their PPP loans forgiven. PPP loans should have helped people like your neighbor and instead we end up with more wasted tax payer money going to the mega rich.
Yep. While my neighbor lost his business during covid due to the ridiculousness of the PPP loans-- and Elon and others get billions. But hey, keep on voting for your candidates of choice everybody! 🙄
PPP loans being exploited to hell and back did a lot of damage
Not sure about the EU Though in the USA.... [16 trillion in the past two years](https://techstartups.com/2021/12/18/80-us-dollars-existence-printed-january-2020-october-2021/) To their credit, they did put a halt to it once they saw things were out of control, though Putin is only part of the mess. We didn't learn the lessons from [Zimbabwe](https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe#:~:text=In%20April%202009%2C%20Zimbabwe%20stopped,the%20end%20of%20that%20year.) or [Venezuela](https://en.wikipedia.org/wiki/Hyperinflation_in_Venezuela) So if you ever wonder why a bottle of shampoo went up 40%, just remember that 40% of the USA's wealth was generated over 2 years, and a whole lot of businesses got their PPP loans forgiven. Oh.... and student loan forgiveness is the problem /s